INTRODUCTION

The Nati onal Oil and Gas Policy for Uganda (NOGP), which was approved during 2008, is the key document guiding the development of the country’s oil and gas sector. The Ministry of Energy and Mineral Development (MEMD) presents this progress of implementati on of NOGP to keep all stakeholders informed on developments in the country’s oil and gas sector and to share the progress be-ing made with regard to each of the ten objecti ves of the Nati onal Oil and Gas Policy to date.

CURRENT STATUS OF THE SECTOR

Uganda’s oil and gas sector has transiti oned from the explorati on and appraisal phase to the development phase in preparati on for sustainable producti on of the petroleum resources that have been discovered in the country. The oil companies currently licensed in the country to undertake petroleum explorati on, development and producti on are: - China Nati onal Off shore Oil Corporati on Uganda Limited (CNOOC (U) Ltd), Total E&P Uganda B.V and Tullow Uganda Operati ons Pty Limited.

Other signifi cant investors are expected to join the sector during 2015/16 when i) the procurement of a lead investor for the development of a refi nery and its att endant infrastructure in the country is concluded ii) new licensees come into the country at the conclusion of the ongoing competi ti ve licensing round and iii) the subcontractors and service providers who will come into the country to support the development phase for the oil fi elds, development of the refi nery and constructi on of pipelines and other faciliti es.

Data Acquisiti on

Over thirty (30) seismic surveys have been undertaken in the country to date resulti ng in the acquisiti on of 7,254.6 line Kilometres of Two Dimensional (2-D) seismic

data and 1,948.6 square kilometres of Three Dimensional (3-D) Seismic data.

One hundred and twenty (120) explorati on and appraisal wells have been drilled in the country with one hundred and six (106) of these wells encountering oil and/or gas which is an unprecedented drilling success rate of over 85%.

Confi rmati on of Resources

The above menti oned work has led to the discovery of twenty one (21) oil and/ or gas fi elds in the country’s Alberti ne Graben. Appraisal of these discoveries has established that petroleum resources in these fi elds are now esti mated at over 6.5 billion barrels of oil equivalent in place with 1.4 billion barrels of these resources esti mated to be recoverable.

Investment

Cumulati ve foreign direct investment in petroleum explorati on in the country since 1998 was esti mated to be USD 2.8 billion at the end of 2014 and is projected to be over USD 3 billion at the end of 2015. Investment in the petroleum sector is expected to increase signifi cantly as the country enters the development, and subsequently the producti on, transportati on and refi ning phases of the petroleum value chain.

Regulatory Framework

Following a wide consultati ve process, two new laws were enacted during 2013 to update the legal framework for the sector. These are; the Petroleum (Explorati on, Development and Producti on) Act 2013 and the Petroleum (Refi ning, Conversion, Transmission and Midstream

Storage) Act 2013. Regulati ons to operati onalize these laws have been draft ed and these include Technical aspects like metering, Nati onal Content together with Health, Safety and Environment aspects for both the Upstream and Midstream Sub-sectors. In additi on, the Public Finance Act 2015 was enacted during March 2015 and this Act provides for among others the management of revenues accruing from petroleum acti viti es. These pieces of legislati on together with other relevant laws and statutes like those on Environment, Wildlife, Water, Land and Income Tax, are used in regulati ng the country’s petroleum sector.

THE NATIONAL OIL AND GAS POLICY FOR UGANDA

The Nati onal Oil and Gas Policy for Uganda (NOGP) which was formulated through an extensive consultati ve process and approved in 2008 is the key framework guiding the development of the oil and gas sector in the country. NOGP together with its popular version which has been translated into eleven languages can be accessed at www.petroleum.go.ug and www.energyandminerals.go.ug.

The Policy was developed to comprehensively address issues of explorati on, development, producti on, uti lizati on and commercialisati on of the country’s petroleum resources following the confi rmati on of commercial petroleum reserves in the country in 2006. The discovery of petroleum in the country created excellent opportuniti es for the accelerated development of the economy but also brought along key issues such as anxiety and high expectati ons by the populati on, the need to ensure nati onal parti cipati on

in the development of the sector, the need to develop the sector with due regard to the country’s environment and biodiversity, concerns on management of oil revenues, the need to put in place appropriate regulatory and insti tuti onal frameworks for the sector and decommissioning

of installati ons, among others. The goal of the Nati onal Oil and Gas Policy for Uganda is to “Use the Country’s Oil and Gas Resources to Contribute to Early Achievement of Poverty Eradicati on and Create Lasti ng Value to Society”. The policy has ten objecti ves for developing and uti lizing the country’s oil and gas resources and describes the strategies and key acti ons which need to be taken to maximize the opportuniti es and address the challenges in the sector.

POLICY IMPLEMENTATIONFollowing the approval of NOGP in 2008, Government has conti nued to implement the Policy in line with its (10) policy objecti ves.

THE OIL & GAS SECTOR IN UGANDA

MINISTRY OF ENERGY AND MINERAL DEVELOPMENT (MEMD)

The ZPEB-7001 rig during drilling of Kingfi sher-4 well in Buhuka, Kyangwali Subcounty, Hoima District- September 2014 to March 2015

Map showing status of the discoveries in the Albertine Graben

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ADVERTISER SUPPLEMENT NEW VISION, Thursday, November 13, 2014 25

H. E. Gen. Yoweri Kaguta Museveni, The President of the Republic of Uganda

Hon. Eng. Irene MuloniMinister for Energy and Mineral Development

Hon. Peter Lokeris Minister of State for Minerals

Eng. Simon D’ujunga Minister of State for Energy

Dr. F.A. Kabagambe KaliisaPermanent Secretary for the Ministry

of Energy and Mineral Development

The Vice President of the Republic of UgandaHon. Kiwanuka Ssekandi

Rt. Hon. Prime Minister of the Republic of UgandaNdugu Dr. Ruhakana Rugunda

THE REPUBLIC OF UGANDA

Copyright - Ministry of Energy and Mineral Development

PROGRESS OF IMPLEMENTATION OF THE NATIONAL OIL AND GAS POLICY FOR UGANDA

A summary of the achievements made in implementi ng each of the ten objecti ves is presented below:

Objecti ve 1:

Ensure effi ciency in licensing areas with the potenti al for oil and gas producti on in the country

The confi rmati on of commercial resources of petroleum in the Alberti ne Graben led to the signifi cant lowering of the country’s explorati on risk, hence a need to update the regulatory framework for the sector especially to provide for, among

other things, competi ti ve licensing rounds. Formulati on of legislati on for the sector commenced in 2009 aft er putti ng in place of the NOGP. The Petroleum (Explorati on, Development and Producti on) Act 2013 which repealed the Petroleum (Explorati on and Producti on) Act of 1985, was passed by Parliament during December 2012 and it became eff ecti ve on 5th April 2013 upon Presidenti al assent. In line with the Act, the fi rst competi ti ve licensing round for some of the areas which are currently not licensed was announced by the Minister for Energy and Mineral Development on 24th February 2015. This licensing round covers six areas in the Alberti ne Graben which already have good data coverage.

The six blocks are:- Ngassa (410 Km2) in Hoima District, Taitai & Karuka (565 Km2) in Buliisa District, Ngaji (895 Km2) in Rukungiri & Kanungu Districts, Mvule (344 Km2) in Moyo and Yumbe Districts together with Turaco (425 Km2) and Kanywataba (344 Km2) in Ntoroko District. . A total of 19 companies responded to the Noti ce of request for qualifi cati on for the fi rst licensing round for petroleum explorati on, development and producti on in Uganda.

The companies which qualify will be requested to submit proposals covering their technical and fi scal off ers and based on these submissions, the winner who will eventually negoti ate and enter into Producti on Sharing Agreements (PSAs) will be identi fi ed. These new PSAs are expected to be concluded during 2015/2016.

The Ministry of Energy and Mineral Development has commenced planning for speculati ve geophysical surveys in the other areas of the country which have potenti al for petroleum producti on but with litt le or no data acquired in them to date. Licensing for those areas is expected to be undertaken in future licensing rounds. Less than 10% of the Alberti ne Graben is currently licensed and over 14,000 Sq. km of acreage with high potenti al for petroleum producti on remains unlicensed in the Alberti ne Graben.

This acreage includes over 10,000 sq. km which has become available through relinquishment or surrender of acreage by the licensed oil companies and expiry of explorati on licenses as provided for in the legislati on and the Producti on Sharing Agreements (PSAs) entered into between Government and the oil companies. Another over 10,000 sq. km of acreage with potenti al for petroleum producti on exists outside of the Alberti ne Graben.

The speculati ve geophysical surveys referred to above are planned to be undertaken in these areas in preparati on for their future licensing.

Objecti ve 2: Establish and effi ciently manage the country’s oil and gas resource potenti al.

The explorati on and appraisal of the oil and gas discoveries in the Alberti ne Graben has led to an increase in the country’s petroleum resource base from 300 million barrels of oil equivalent in place when the policy was approved in 2008 to 2 billion and 3.5 billion barrels in 2010 and 2012 respecti vely; and to the current esti mate of 6.5 billion barrels of oil in place with 500 billion standard cubic feet of gas. Out of these resources, 1.4 billion barrels of oil equivalent are esti mated to be recoverable.

The Ministry of Energy and Mineral Development uses the Petroleum Resources Management Systems (PRMS) to classify and report the country’s petroleum resources.A new Insti tuti onal framework for the sector which separates the three aspects of policy setti ng, regulati on of the industry and executi on of the commercial interests of the state respecti vely is being put in place. In this regard, Governmenthas put in place the Petroleum Authority, to regulate the sector and the Nati onal Oil Company to manage Government’s commercial interests (including managing the State Parti cipati on provided for in the respecti ve Producti on Sharing Agreements) in the sector. Members to the Board of Directors for the Uganda Nati onal Oil Company were nominated by His Excellency the President and approved by Parliament in 2014 and

the company was incorporated in June 2015. The Ministry has also been restructured and a Directorate of Petroleum created to bett er support policy setti ng and implementati on as well as carrying out the licensing roles of the Ministry.

Objecti ve 3: Effi ciently produce the country’s oil and gas resources;

Appraisal drilling, three dimensional (3D) seismic surveys and extended well testi ng have been undertaken as part of the eff ort to appraise the oil and gas discoveries made in the country to date. This appraisal work provides a bett er understanding of the volumes of oil and gas in each of the discoveries made and enables identi fi cati on of the most effi cient methods of producing these volumes.The licensed oil companies use the data and informati on acquired during appraisal to prepare Field Development Plans (FDPs) and Petroleum Reservoir Reports (PRRs) which are submitt ed to Government as part of the applicati on for producti on licenses. Applicati ons for producti on licenses for sixteen discoveries, namely Mputa, Nzizi, Waraga, Kajubirizi (Kingfi sher), Kasemene, Wahrindi, Kigogole, Ngara, Ngege, Nsoga, Ngiri, Jobi-Rii, Jobi East, Gunya and Mpyo whose appraisal was completed were submitt ed to Government by the licensed oil companies for assessment before approval.

Out of these, the Kingfi sher Producti on License became eff ecti ve during September 2013 following the approval of its FDP and PRR. Granti ng of the Kingfi sher producti on license marked the country’s entry into the development phase of the

petroleum value chain. Government and the oil companies are in discussion on the submissions made for the other discoveries and additi onal producti on licenses are expected to be granted during 2016.

CNOOC (U) Ltd has commenced predevelopment work on the Kingfi sher oil fi eld starti ng with constructi on of infrastructure to support the operati ons. This includes the constructi on of a 10 kilometer all weather road from

Ikamiro Village, across the escarpment to Buhuka in Kyangwali Subcounty, Hoima district where the Kingfi sher oil fi led is located.

Objecti ve 4: Promote valuable uti lisati on of the country’soil and gas resources

The policy recommends refi ning the discovered oil to supply the nati onal and regional petroleum product demand before considerati on of export opti ons. In order to facilitate achievement of this policy objecti ve, the Petroleum (Refi ning, Conversion, Transmission and Midstream Storage) Act 2013 was enacted by Parliament during February 2013 and became eff ecti ve during July 2013 following Presidenti al assent.

This Act provides for among others, the legal foundati on for the development of a refi nery in Uganda and other midstream infrastructure like pipelines and storage faciliti es. Following enactment of the Midstream Act, the Ministry is working together with the other arms of Government to put in place regulati ons to operati onalize this Act. In additi on, the Ministry together with the Uganda Nati onal Bureau of Standards through Technical Committ ee 16 are developing standards and codes for the operati on of petroleum infrastructure in the country. To date over 50 draft standards have been identi fi ed as required for both upstream and midstream petroleum operati ons and their formulati on has commenced. Of these, 27 standards have been approved by the Nati onal Council for Standards and are ready for applicati on/use.

Regarding, the development of a refi nery in Uganda, the East African Community (EAC) Refi neries Strategy of 2008 recommended, among other things, the development of a second refi nery in East Africa to be developed in Uganda. The other refi nery being that of Mombasa which has since been shut down for the last two years. Government subsequently contracted Foster Wheeler Energy Limited from the United Kingdom during 2009 to carry out a feasibility study on the development of a refi nery in Uganda. This study was undertaken during 2010/2011 and it defi ned the key aspects of developing a refi nery in the country such as the size and confi gurati on of the refi nery, its locati on and fi nancing as well as markets for the petroleum products to be produced from the refi nery. The study also confi rmed the economic viability of refi ning petroleum in the country and its recommendati ons were adopted by Government during 2011.

The development of a 60,000 barrel per day refi nery to be located at Kabaale in Buseruka Subcounty, Hoima District, is now being taken forward by Government. Acquisiti on of the land required for the refi nery commenced in 2012 with the preparati on of a Resett lement Acti on Plan (RAP) for project aff ected persons (PAPs). The RAP was completed during 2012 and is now being implemented. As part of this implementati on, payment of compensati on to the PAPs who opted for cash commenced in December 2013 and is now due to be concluded. By the end of June 2015, 95% of PAPs who opted for cash compensati on had received their payments. In additi on, 533 acres of land was acquired in Kyakabooga Parish, Buseruka Subcounty for resett lement of the PAPs who opted for relocati on and physical planning for this land has been completed. Constructi on of resett lement houses for those who opted for relocati on is due to commence during 2015 and is expected to be completed during 2016.

In further preparati on to develop the refi nery, Government contracted Taylor-DeJongh from USA in January 2013 as Transacti on Advisor to advise on the structuring of the project as well as the selecti on of a lead investor to lead the constructi on and operati on of the refi nery. A Request for Qualifi cati on (RFQ) for a lead investor/operator was issued during October 2013 and six fi rms/ consorti a were selected from the applicants and short-listed to receive the Request for Proposals (RFP);

A Request for proposal was issued to the six fi rms/ consorti a during January 2014 and four of them submitt ed detailed proposals at the end of May 2014. Two consorti a, namely RT – Global Resources from Russia and SK Engineering and Constructi on from South Korea qualifi ed for the fi nal stage of bidding and were issued with a Request for Final Off ers in October 2014.

PROGRESS OF IMPLEMENTATION OF THE NATIONAL OIL AND GAS POLICY FOR UGANDA

Hon. Irene Muloni, Minister for Energy and Mineral Development. addressing a media press conference (Right) is Dr. F.A.

Kabagambe-Kaliisa PS MEMD

Map showing the six blocks (in red) for the 1st licensing round

Physical Development Plan for settlement area in Kyakaboga Parish, Buseruka Subcounty, Hoima District. The area where the project affected the people in the

Refi nery area.

Mr. Ernest Rubondo, Ag Director of Petroleum on a supervisory visit to the Kingfi sher development area

THE OIL & GAS SECTOR IN UGANDA

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Both consorti a submitt ed their fi nal off ers during January 2015. The RT Global Resources led consorti um (which includes GS Engineering and Constructi on from South Korea with Mitsui Corporati on from Japan as a partner together with VTB Capital Plc, JSC Tatneft and Telconet Capital from Russia) was selected as best preferred bidder to be the lead investor for Uganda’s refi nery project during February 2015. Following conclusion of the negoti ati ons with the best preferred bidder and executi on of the key project agreements, Government and the lead investor will consti tute a refi ning company that will take forward the development, fi nancing, constructi on and operati on of the refi nery. Negoti ati ons between Government and the RT Global Resources led consorti um for the fi nal agreements are due to be concluded and the refi nery company formed in 2016. In additi on to development of the refi nery, Government agreed to a revised commercializati on plan which provides for exporti ng some of the crude oil produced in the country. In this regard, a Memorandum of Understanding (MoU) between Government and the Licensed Oil Companies which provides for the commercializati on of the discovered oil and gas resources was concluded during 2014. The MoU provides for use of the petroleum resources discovered in the country for power generati on, supply of Crude Oil to the refi nery to be developed in Uganda by Government and export of Crude Oil through an export pipeline or any other viable opti ons to be developed by the Industry. The Governments of Uganda, Kenya and Rwanda through the Northern Corridor Infrastructure projects contracted Toyota Tshusho from Japan to undertake a feasibility study for a crude oil export pipeline. Government is seeking to achieve a least cost route opti on to the East African Coast. The study will contribute to decisions on the routi ng and structuring of the pipeline among others.

Objecti ve 5: Promote the development of suitable transport and storage soluti ons which give good value to the country’s oil and gas resources.

The following key studies on the transportati on and storage of petroleum in the country have been concluded:

A study for the development of pipelines and storage faciliti es of petroleum commoditi es (crude oil and gas) from the fi elds to the refi nery was concluded during March 2012. Planning for the transportati on of crude oil from the oil fi elds to the refi nery is ongoing and the development of these crude oil feeder pipelines will be developed as part of the oil fi elds. Surveying of the route to transport crude oil from the Kingfi sher fi eld in Buhuka to the refi nery area in Kabaale commenced in June 2015.

A study covering the distributi on and storage faciliti es of petroleum products (gasoline, diesel, kerosene, jet fuel etc.) from the refi nery to diff erent nati onal and regional markets was concluded during November 2012. A 205 km pipeline to transport refi ned petroleum from the refi nery in Kabaale, Hoima to a distributi on center in Buloba, west of Kampala is planned to be developed as part of the refi nery project. A routi ng Study and a Resett lement Acti on Plan for this pipeline route have commenced and plans to extend this pipeline from Kampala to Kigali and Eldoret are also under considerati on.

The Ministry of Energy and Mineral Development has concluded the preparati on of a draft Strategy and Plan for the Transportati on and Storage Faciliti es of Petroleum Commoditi es and Products in Uganda which is due for submission to Cabinet during 2016.

Constructi on of the road infrastructure required for the development of the oil and gas sector is also ongoing. In this regard, the Hoima-Buseruka-Kaiso Tonya Road whose constructi on commenced in 2013 was completed and handed over to Government in December 2014. Designing of the Kyenjojo-Kagadi-Hoima-Masindi as well as that for Hoima – Biso – Wanseko Road were completed by the Ministry of Works and Transport and procurement of contractors for these two roads is ongoing.

Objecti ve 6: Ensure collecti on of the right revenues and use them to create lasti ng value for the enti re nati on.

The Ministry of Finance, Planning and Economic Development is taking lead in implementati on of this policy objecti ve. The Ministry formulated an Oil and Gas Revenue Management Policy that was adopted in February 2012. The Ministry also tabled the Public Finance Bill 2012 to Parliament during May 2012. The bill was passed by Parliament during November 2014 and gazett ed on 6th March 2015, following Presidenti al assent. This Act provides for among others, the management of revenues accruing from petroleum resources. As of March 2015, Government had received over UGX 2.4 trillion from Non-tax revenues, Capital Gains Tax, and other tax obligati ons from operati ons in the sector. Government’s successful defense in the Permanent Court of Arbitrati on in February 2015, of the assessment of Capital Gains Tax on the sale of Heritage assets and an out of court sett lement of the Capital Gains Tax dispute with Tullow Oil during June 2015 regarding its farm-down to CNOOC and Total in 2012 are testi mony to the eff orts Government is ensuring collecti on of the right revenues in the oil and gas sector.

Objecti ve 7: Ensure opti mum nati onal parti cipati on in oil and gas acti viti es.

A study to establish the opportuniti es and challenges for the parti cipati on of Ugandans in the oil and gas sector was commissioned in 2010 and completed during 2011. The fi nal study report can be accessed at www.petroleum.go.ug. The key recommendati ons of the study included; establishment of an insti tuti onal framework for the implementati on of nati onal content policies for the oil and gas sector, ensuring capacity building in people and in fi rms (enterprise development), and facilitati ng parti cipati on of Ugandans in the sector with due regard to maintaining the competi ti veness of the sector. The recommendati ons of this study are now being implemented and the acti viti es undertaken to date include putti ng in place a Nati onal Content Offi ce in the Ministry of Energy and Mineral Development, setti ng up an Associati on of Oil and Gas Service Providers (AOGAS) in the country and formulati on of a Nati onal Content Policy and Plan. The draft Nati onal Content Policy and Plan was prepared and stakeholder consultati ons concluded during 2014. The Policy and Implementati on Plan are expected to be approved during 2016.

Draft Nati onal Content Regulati ons for the Upstream and Midstream Acts have also been prepared and they cover the provision of goods and services by Ugandan businesses, employment of Ugandans and transfer of technology. As these insti tuti ons and frameworks for Nati onal Content are being developed, eff orts to ensure that Ugandans are acti vely parti cipati ng in the sector through direct employment and provision of goods and services to the oil and gas sector are conti nuing. The acti viti es being undertaken to achieve this include requiring the licensed oil companies to develop Nati onalisati on Plans which are approved and monitored by Government. The three licensed companies (Tullow, Total and CNOOC) together with the internati onal service companies like Baker Hughes, Schlumberger, EXALO, ZPEB, Oriental Geophysics Company and Halliburton employed over 1,000 Ugandans during 2013/14 with each of the licensed companies having more than 50% of its staff as Ugandans.

To date, more than 1000 Nati onal Enterprises have provided services such as Logisti cs, civil works, Environment consulti ng services, Catering and Hotel Accommodati on, cleaning and fumigati on services, transportati on, communicati on, Medical services and manpower/ recruitment services among others to the Oil and Gas Sector. These companies have also provided employment to over 9,000 Ugandans through indirect and induced employment. In preparati on for the development of the discovered oil fi elds, the licensed oil companies undertook an Industrial Baseline Study to assess the projected demand for the planned acti viti es and also assess the ability of the diff erent service sectors in the country to supply the emerging oil and gas sector. The study identi fi ed the demand and supply gaps in terms of quanti ty and quality and recommended key acti ons to be undertaken which are being implemented. These acti ons include disseminati on of informati on on the requirements such as manpower and services among others, putti ng in place an Enterprise Center to raise the standards of businesses and entrepreneurs, among other measures.

Objecti ve 8: Support the development and maintenance of nati onal skills and experti se.

Under this policy objecti ve, the Uganda Petroleum Insti tute Kigumba (UPIK) which off ers diploma and certi fi cate courses in petroleum related studies was established under the Ministry of Educati on and Sports and it opened during March 2010. The Insti tute has to date produced 88 Technicians, who undertook 2 years formal training at UPIK and then 6 months of industrial training in Trinidad and Tobago. Admission of 30 students for UPIK’s third intake was undertaken in 2014 and Infrastructure for the insti tute including lecture rooms, dormitories and workshops are being put in place together with the procurement of training equipment for the workshops. The infrastructure being put in place will enable the students to undertake

most of their industrial training in the country. A 5 year insti tuti onal development plan has been put in place to guide the development of the insti tuti on. At the professional level, a Bachelor’s degree in Petroleum Geosciences was introduced at Makerere University in the academic year 2009/2010. Demand for this training saw the enrollment grow from 46 students to 57 and 80 students in the academic years 2009/10, 2010/11 and 2011/12 respecti vely. The pioneer 46 students graduated in January 2014. MEMD supports this training through facilitati ng fi eld work in the Alberti ne Graben, supervising fourth year students’ projects and providing internship placement for some of the students. Makerere University also commenced a Master of Science degree in Petroleum Geoscience Programme during 2012. This post graduate programme is being undertaken in collaborati on with the University in Bergen, Norway. Private insti tuti ons, including Victoria University, Insti tute of Petroleum Studies/ Quest Energy, OGAS Training East Africa, ICON Industry Services, among others have also commenced both short and long term training courses in Petroleum studies in the country. There is, however sti ll a need for the insti tuti ons to take on an opti mum number of students at both undergraduate and post graduate levels for whom fi eld training opportuniti es can be made available and the job market can accommodate. As these initi al capacity building eff orts are being taken forward, MEMD, working with the Ministry of Educati on, Science, Technology and Sports and with support from the World Bank, have completed a comprehensive study on the skills requirement for the enti re petroleum value chain in the country and a strategy and plan for skills development for the sector is under development. This study documents the skills required for explorati on, development, producti on, refi ning and transportati on at the arti san, technical and professional levels of educati on.Government has also conti nued to prioriti ze capacity building of offi cers from the diff erent insti tuti ons taking forward the development of the oil and gas sector in the Country. These include Ministries of Energy and Mineral Development, Finance Planning and Economic Development, Justi ce and Consti tuti onal Aff airs, , Lands, Housing and Urban Development, Water and Environment, Nati onal Environment Management Authority, Uganda Wildlife Authority, Uganda Revenue Authority, Offi ce of the Auditor General and Bank of Uganda among others. More than 180 offi cers of Government have to

PROGRESS OF IMPLEMENTATION OF THE NATIONAL OIL AND GAS POLICY FOR UGANDA

H. E Y. K. Museveni the President of Uganda commissions the Hoima- Buseruka-Kaiso Tonya Rd. during Feb 2015 together with Hon. Irene Muloni

(Extreem Above) Men clearing the bush (Above) Men with marke stones for the route demarcation during the surveying of the pipeline route from KingFisher to

the refi naery area

MEMD staff with Uganda employees at a drilling activity in the Abertine Graben during a National content monitoring visit

Some of the infrastructure at UPIK; Pre-Fabricated structures hosting lecture rooms, dormitaries and workshop. (Below) Prof Charles Kwesiga head of UPIK Management

Team infrom of the lecturer’s living quaters

THE OIL & GAS SECTOR IN UGANDA

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date been trained at post graduate level specializing in diff erent petroleum disciplines. The oil companies licensed in the country such as Tullow Oil, Total and CNOOC together with their service providers also and conti nue to off er training opportuniti es for the sector at both the blue collar and professional levels. Some Development Partners such as Japan Oil, Gas and Metals Nati onal Corporati on (JOGMEC), Norwegian Agency for Development Cooperati on (NORAD), United States Agency for Internati onal Development (USAID) and the World Bank, among others are also off ering capacity building opportuniti es to Ugandans in oil and gas related studies.

Objecti ve 9: Ensure that oil and gas acti viti es are undertaken in a manner that conserves the environment and biodiversity

The Ministry of Water and Environment together with the Nati onal Environment Management Authority (NEMA) conti nue to play a leading role in the implementati on of this policy objecti ve. The Alberti ne Graben, where oil and gas acti viti es are taking place in Uganda, is recognized as one of the most bio-diverse rich areas in the world. Environment and Social Impact Assessments (ESIAs) are conducted prior to undertaking each acti vity in the oil and gas sector as required by the Nati onal Environment Act Cap 153 and EIA Regulati ons. During the EIA process, consultati ons are undertaken with stakeholders at community and nati onal levels to ensure a harmonious interface between petroleum acti viti es, communiti es, the environment and the biodiversity of the Alberti ne Graben. In additi on, routi ne Environmental Inspecti ons and Audits are carried out by the respecti ve responsible arms of Government to assess compliance with environmental requirements and to investi gate impacts which may not have been predicted at the ti me when EIA approval was granted. Drilling waste has in the past been containerized and monitored at designated sites prior to authorizati on of the fi nal disposal place. In 2014 NEMA authorized six fi rms to set up petroleum waste treatment and disposal faciliti es in the country. Two of these fi rms, Enviroserve and Luwero Industries have constructed faciliti es in Hoima and Nakasongola respecti vely and are now licensed to operate these faciliti es. Constructi on of the Enviroserve facility at Nyamasoga commenced during 2014 and the facility was offi cially launched during April 2015. In additi on, the following environmental and biodiversity tools have been developed as part of the eff orts to ensure appropriate environment management for the oil and gas sector in the country,

An Environment Sensiti vity Atlas (ESA) for the Alberti ne Graben was developed in 2009 and updated in 2011. The ESA describes the diff erent levels of sensiti vity in the diff erent parts of the Graben with a view to guiding the oil and gas acti viti es in the area.

An Environment Monitoring Plan (2012 to 2017) for the Alberti ne Graben that defi nes the key monitoring indicators together with an enforcement and compliance monitoring strategy have been put in place and are being implemented.

Guidelines for operati on of Oil Companies in Protected Areas have also

been developed. A Strategic Environment Assessment (SEA) for Oil and Gas Acti viti es in

the enti re Alberti ne Graben was prepared and approved by Government in July 2015. The SEA will be used to ensure that environmental concerns are captured in Government’s PPPs (plans, programmes & policies).

A Nati onal Oil Spill Conti ngency Plan is under development for use in the (unlikely) event of an oil spill.

Management plans for the protected areas within the Alberti ne Graben such as Murchison Falls Nati onal Park, Queen Elizabeth Nati onal Park and Budongo Forest have been updated to provide for the ongoing and planned oil and gas acti viti es within these areas of high biodiversity.

A multi -insti tuti onal environment monitoring team led by the Nati onal Environment Management Authority (NEMA) and composed of the Uganda Wildlife Authority (UWA), Fisheries Resources Department, Nati onal Forestry Authority, Directorates of Environmental Aff airs and Water Resources Management in the Ministry of Water and Environment, District Local Governments and the Directorate of Petroleum is in place to monitor the interface between the environment and petroleum acti viti es. The monitoring framework includes representati ves of these insti tuti ons based in the fi eld, regular visits to fi eld operati ons by senior level technical offi cers from these insti tuti ons who report to a committ ee of executi ves from the same insti tuti ons.Land use planning for the Alberti ne Graben and its surrounding areas as recommended by the Policy commenced when the Graben was declared a special planning area in 2010. Physical planning for specifi c towns in the operati on areas, namely Sebagoro in Hoima District together with Buti aba and Buliisa in Buliisa district that will be impacted by the developments has been undertaken together with planning for the areas around the refi nery development area. The Ministry of Lands, Housing and Urban Development has prepared a regional physical development plan for the enti re Alberti ne Graben.

Objecti ve 10: To ensure mutually benefi cial relati onships between all stakeholders in the development of a desirable oil and gas sector for the country.

Development of the oil and gas sector in Uganda is being taken forward in a manner that recognizes the roles of diff erent stakeholders and seeks to ensure their parti cipati on in the development of the sector. Extensive consultati ons were undertaken during formulati on of the Nati onal Oil and Gas Policy and in the preparati on of the new petroleum legislati on that became eff ecti ve subsequently. The consultati ons on the new laws were enhanced by the additi onal consultati ons which Parliament undertook both in country and overseas in preparati on for the debate on the Bills. Consultati ons with stakeholders conti nue to be undertaken during studies relati ng to the Refi nery Development Project, Nati onal Parti cipati on and Environment Management, among others. The consultati ons undertaken while putti ng in place these frameworks do not only enhance the quality of the frameworks but also enhance ownership of the outcome of the frameworks by the respecti ve stakeholders. In additi on to the consultati ve process, a Nati onal Communicati on Strategy for the Oil and Gas Sector was developed and put in place during 2011 to bridge the communicati on gap between the oil and gas industry and the general public. This strategy, which is under implementati on can be accessed on www.petroleum.go.ug. A public informati on and educati on eff ort to enable Ugandans achieve a bett er understanding of the developments and opportuniti es in the sector and how they (Ugandans) can parti cipate is also on-going. This eff ort has included radio and television programmes across the country, engagements with diff erent stakeholder groups such as the media, civil society, business entrepreneurs, religious and cultural insti tuti ons together with leaders and communiti es in the Alberti ne Graben as focal stakeholders. In additi on, the website www.petroleum.go.ug

is regularly updated with recent developments and documents relati ng to the oil and gas sector.

The Policy also recommends regional cooperati on in the development of Uganda’s oil and gas resources. The Alberti ne Graben where oil and gas explorati on is taking place is shared with the Democrati c Republic of Congo. In 1990, the Governments of Uganda and the Democrati c Republic of Congo (DRC) (then the Republic of Zaire) signed an “agreement of cooperati on for the explorati on of hydrocarbons and exploitati on of common fi elds” between the two countries. As a result of the understanding arising out of this Agreement, the Oil companies which have been licensed by the Government of the DRC to undertake oil explorati on and development in DRC are using Uganda as a base or as a transit route for movement of their equipment and personnel required for their operati ons. For example, Soco E&P DRC completed Environment and Bathymetric studies and acquisiti on of seismic and aeromagneti c data over the Lake Edward basin in DRC using a base camp located at Lake Katwe in Uganda. In additi on, the East African Community (EAC) Partner States are also working together to promote investment in the region’s emerging oil and gas sector, mainly through the biennial East African Petroleum Conference and Exhibiti on (EAPCE) and the EAC Sectoral Council on Energy. During the 7th EAPCE 2015 that was held in Kigali, Rwanda during March 2015, Uganda presented the country’s fi rst licensing round and also made various presentati ons on Uganda’s oil and gas potenti al. In additi on the Northern Corridor Infrastructure Summit also takes forward the development of key infrastructure such as pipelines, the refi nery project and refurbishing the railway network to, among others, support the developments in the petroleum sector in the region. Government is conti nuing to establish bilateral linkages with other countries where oil and gas explorati on, development and producti on is taking place, including Australia, India, Malaysia, Norway, Trinidad and Tobago and USA, among others. This is with a view to provide opportuniti es to share experiences and best practi ces for the country’s oil and gas sector.

CONCLUSION

The Government of Uganda is taking forward the development of the oil and gas sector in the country through implementati on of the Nati onal Oil and Gas Policy. The oil companies that have been licensed in the country are conti nuing to invest in the development of this sector. The explorati on success in the country has led to the transformati on of the Alberti ne Graben from being a fronti er explorati on basin to an internati onally recognised and established petroleum province. Planning for the development, producti on, refi ning and transportati on of petroleum in the country is ongoing. The oil and gas sector which is a newly emerging sector in the country is beginning to provide opportuniti es and benefi ts for the people of Uganda, its economy, and the region at large. These opportuniti es include; new investments, development of infrastructure, enhanced demand for services in the country, employment opportuniti es; establishment of offi ces and bases in the country by multi nati onal companies; technology transfer and industrial development, among others. The Ministry of Energy and Mineral Development appreciates the roles played by the respecti ve stakeholders and invites the public to support this new and important sector of development in the country through acti vely playing their respecti ve roles. The Government of Uganda is committ ed to eff ecti ve and effi cient development of the Country’s Nascent Oil and Gas Sector. For More Informati on Contact:

The Permanent SecretaryMinistry of Energy and Mineral Development, Amber House, Plot 29/33 Kampala Road, P.O Box 7270 Kampala-Uganda, Tel: Offi ce: +256-41-234733/ 230243 Email: psmemd@energy.go.ug / directorate@petroleum.go.ugWeb; www.energyandminerals.go.ug and www.petroleum.go.ug

PROGRESS OF IMPLEMENTATION OF THE NATIONAL OIL AND GAS POLICY FOR UGANDA

Students from Victoria University pursuing petroleum related courses on a fi eld visit to operations in the Albertine Graben

Map showing the physical plan for the Albertine Graben

Rt. Hon. Anastase Murekezi, Prime Minister of Rwanda (right) is taken round Uganda’s exhibition booth by Eng. Irene Muloni (centre) and Hon. Peter Lokeris (2nd right)

during the 7th EAPCE during March 2015

Community sensitazation meeting on land related issues in Ngwendo Sub county, Buliisa District during April 2015.

(Above) Waste treatment facilities at the Enviro serve waste manegement facility in Nyamasoga in Buseruka Subscounty, Hoima District. (Below) A solid waste engineering

land fi ll at the facility.

THE OIL & GAS SECTOR IN UGANDA

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